The year’s first quarter delivered few sightings of a yellow brick road that would lead Clark County’s downturn-weary workers to a wizard who could finally deliver a promise of prosperity.
Indeed, with hopeful signs of job growth offset by continuing layoffs and worries of more job losses still to come, the fundamentals of the local economy remained weak.
Clark County unemployment stood at about 11 percent in February. There’s little evidence based on statewide tracking of any significant improvement in March. Those unemployment numbers are almost 3 percentage points higher than the Portland region’s rate, and they’re well above Oregon, Washington and U.S. figures.
Clark County first quarter events:
• Riverview Bank reports a
$16 million quarterly loss.
• Gravitate Design Studio moves into former Koplan’s Home Furnishings building in downtown Vancouver.
• RS Medical prepares for more layoffs and job outsourcing.
• Sterling Bank closes on its acquisition of First Independent Bank.
• Nautilus Inc. finally turns
• Barrett Business Services negotiates end to proxy fight.
• Cisco Systems purchases Vancouver’s ClearAccess.
And, initial unemployment figures were still one-third above prerecession levels, according to the state Employment Security Department. Further, job creation is weak to nonexistent, with nonfarm employment dropping by 500 jobs in February.
With more foreclosures still to come and student debt on the rise, regional economist Scott Bailey holds out little hope for a rally that would push the economy forward very quickly. “There are natural dynamics to the economy that work to improve things,” said Bailey, who works for the state Employment Security Department. “After a credit meltdown, they work slowly until debt is cleared out.”
Looking for a bright side, the county’s unemployment rate has dropped steadily from the recession’s peak of 15.8 percent in January 2010, even if some of the drop can be attributed to workers giving up their job search,
Still, the year’s first three months delivered small, much-welcomed movement away from the economic storm that has engulfed the county, the region, and much of the nation since 2008. A dramatic decline in foreclosures offered one glimmer of hope.
In February, Clark County’s number of foreclosures continued to fall for the 10th month in a row, with 134 homes in some stage of foreclosure. The number was down 65 percent compared with the same month last year, according to RealtyTrac, which tracks foreclosure rates nationwide. But many experts warned against exuberance, noting that a recent legal settlement between many states and major lenders eliminates legal ambiguity about foreclosure actions and could lead to a new wave of bank foreclosures.
In the business sector, PeaceHealth has continued its investment in a new headquarters in east Vancouver’s Columbia Tech Center. It has spent $8 million to date on remodeling of its offices. Of the 214 employees in the PeaceHealth building, 170 have arrived from out-of-town locations.
Nautilus Inc., PeaceHealth’s neighbor in the Tech Center’s Columbia Center, in March posted a profit of $1.4 million for the previous quarter. That represented a dramatic turnaround from the fitness company’s net loss of $22.8 million for all of 2010. The company employs 320 people, mostly in Vancouver and Portland.
Fisher Investments, another east county business anchor, opened a second building on its 120-acre Camas campus in March. The building houses 40 workers and sophisticated equipment, including a $1 million printer for the company’s high-end materials. It has some 450 account managers and office staff in its main building.
For the first time in a long time, construction and development projects were back in the news. In March, 61 permits were issued to build single-family houses in Vancouver and unincorporated Clark County, up 35.6 percent from 45 permits handed out in the same month last year. On a larger scale, downtown Vancouver got a boost when Gravitate Design Studios, a growing Web design firm, moved into the historic Koplan’s Home Furnishings building at 1012 Washington St. The company is using the second floor as offices with plans to create first-floor incubator space for business startups.
Further east, a developer disclosed in March plans for a $5 million project at Southeast Mill Plain Boulevard and 164th Avenue that will include a 7-Eleven convenience store and gas pumps, as well as a separate building with a retail outlet and urgent care clinic. And an 11-acre former lumber-processing site at the Port of Camas-Washougal was sold for $1.8 million to investors who will lease a portion of the land to National Pipe and Piling Inc., a company that fabricates and distributes steel pilings for commercial construction.
But nagging reminders of a still-troubled economy were never far away. Riverview Bancorp reported a $16.6 million loss for the fiscal quarter ending Dec. 31. About half was placed in reserve for losses on a small number of loans, and the remainder was a bookkeeping set-aside that can be reversed if the bank returns to profitability. The bank says its deposits are growing but it is still hampered by a shortage of lending opportunities to qualified borrowers.
Struggling Vancouver medical equipment company RS Medical continued its move toward shifting some of its administrative jobs to outsourced workers, likely based in India. The company, with 400 employees nationwide including about 200 in Vancouver, is silent about the number of anticipated layoffs as it shifts its business strategy into areas requiring higher-skilled employees. But the Washington Employment Security Department estimated in March that some 65 workers laid off as long ago as Feb. 27, 2011 are eligible for “worker adjustment assistance” under the 1974 U.S. Trade Act because their jobs are being outsourced to a foreign country.
A time of transitions
The year’s first quarter was marked by two key business transitions. The sale of family-owned First Independent Bank to Spokane-based Sterling Bank, first announced last fall, was consummated March 1. The First Independent name remains on bank branches during a transition period, which Sterling expects to complete by July. Almost three dozen First Independent employees didn’t make the transition — some retired, others faced layoffs, and some went to work for First Independent’s owners, the Firstenburg family. Sterling anticipates making more layoffs by July.
Vancouver lost one of its successful technology startups, communications software company ClearAccess, which was sold in March to Silicon Valley giant Cisco Systems. Company co-founders Ken Hood and Joel Pennington were among the 22 key employees who will move to a Cisco office in Lake Oswego, Ore. The hardware portion of ClearAccess’ business, called SmartRG Gateways, will continue under the name SmartRG Inc., based in Vancouver with between 15 and 20 employees.
Two publicly traded companies based in Clark County made headlines they couldn’t have enjoyed reading.
Barrett Business Services Inc. finally put an end to an embarrassing proxy dispute with the widow of William Sherertz, who has been CEO of the Vancouver human resources company. Kimberly Sherertz had launched a proxy war in November to remove all but one of the company’s board members. In March, the company agree to buy about 2.5 million shares from the estate of William Sherertz in a deal valued at nearly $60 million, finally putting an end to the matter.
Vancouver-based Northwest Pipe Co. reached no resolution on its long-running problems. In March, it received notice that it faces being removed from the Nasdaq stock exchange if it doesn’t produce an updated plan to comply with exchange listing rules.
Finally, there were signs that some community leaders were looking for those larger, long-term projects that could presage better times. The Columbia River Economic Development Council made known that it was pursuing Boeing subcontractors in Wichita, Kan. who might consider moving to the Northwest in light of Boeing’s announcement that it will close its Wichita parts plant by the end of 2013. And Clark College continued to put out feelers for a north county campus in Ridgefield or Battle Ground, an expansion that many leaders consider crucial to the county’s long-term economic health.
But those were much further down the yellow brick road, and the man behind the curtain may not be a wizard after all.